Joe Pitts: “We've heard a lot lately about the need for a European-style value-added tax in the U.S. to solve our budget problem.…”

“We've heard a lot lately about the need for a European-style value-added tax in the U.S. to solve our budget problem. And just yesterday, the ruling coalition in Britain announced that it wants to raise their nation's value-added tax from 17.5 percent to 20 percent. It's estimated that this increase would cost 163,000 jobs and reduce consumer spending by $5.3 billion in the United Kingdom. It's not a surprise that the VAT tax is creeping up in Britain. The average rate in Europe is now around 20 percent, and Greece raised their VAT rate to 21 percent as part of their bailout agreement. This is yet more evidence that the VAT taxes are easy for countries to raise during times of fiscal crisis. With so much discussion about an American VAT, we have to be aware of what the true cost of such a tax would be to our own job growth and consumer spending. Early proposals might call for a 5 percent VAT tax, but in truth, the seemingly easy revenue would make it all too easy for the U.S. Government to quickly raise taxes to European levels. This seemingly easy tax revenue would have a great cost--American jobs. The VAT tax is one tax we can't afford in America.”